California's CDS rose after bankers report

DeborahLevine

NEW YORK (MarketWatch) -- Credit default swaps on California's 10-year bonds rose on Thursday to 193.8 basis points in mid-day trading, according to CMA Datavision. On Thursday, California Treasurer Bill Lockyer released a report earlier showing that investment banks that have helped California sell bonds have also traded $27.5 billion in credit-default swaps on the state's general obligation bonds since 2007. CDS is a type of derivative that pays out in the event of a debt default. The price of protection climbs when investors are more concerned. For California's 10-year debt, the CDS climbed from 188.8 basis points on Wednesday, but is down from 283 basis points a year ago. By comparison, CDS on Greece's 5-year debt hit 636.9 basis points during the day. A basis point is 0.01%.

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